Photo: ICPonline
- Previous Article Family weekend returns with kids’ fair, pet events and food celebration
- Next Article Three-month rule threatens Finland’s ability to retain skilled foreign workers
One in four over-indebted Finns has taken out a payday loan to fund gambling, according to a new survey by legal firm Takaisinperintä. One in five used the high-interest loans to pay for holidays. The most common reason remains everyday needs, particularly unexpected home repairs.
The findings are based on responses from 765 heavily indebted individuals using Takaisinperintä’s services.
The firm specialises in assisting clients who have fallen into financial difficulty due to payday loans. In Finland, an estimated 300,000 people are over-indebted as a result of such loans. Each year, nearly one in ten citizens ends up in enforcement proceedings.
Nearly half of respondents said they had used payday loans to cover urgent household maintenance. One in three had used the funds for clothing, accessories or electronics. Twenty-eight percent admitted using the money for gambling or betting.
Only one in ten had used a payday loan to fund substance use.
“Contrary to common assumptions, these loans are usually not spent on alcohol or luxuries,” said Olli-Matti Korhonen, CEO of Takaisinperintä. “Most borrowers are just trying to deal with everyday crises. If your washing machine breaks and you don’t have savings, a payday loan may seem like the only option – even if it’s never a good one.”
The second most common driver of uncontrollable debt was the purchase of consumer goods. Gambling and betting followed closely.
Takaisinperintä helps clients recover interest payments deemed excessive, often through negotiations or legal action. The firm says it has a 99 percent success rate. Clients do not incur additional financial burden from using the service.
Life events that typically trigger spirals of debt include health issues, divorce, addiction, and unemployment. Forty-two percent of respondents identified their own health problems as a key factor. Divorce was cited by 40 percent, gambling addiction by 32 percent, and unemployment by 30 percent. More than 10 percent said having a child had accelerated their indebtedness.
Korhonen said the link between debt and addiction is often indirect. “We regularly hear from women who are in debt because they’ve tried to support a partner struggling with substance abuse.”
Paying off payday loans with new loans is common. Sixty-five percent had taken out another payday loan to cover an earlier one. A quarter had borrowed from a friend or family member. Both options tend to deepen the debt.
By law, the minimum payday loan amount in Finland is €2,000. For a third of those surveyed, the largest single loan had been between €2,000 and €3,000.
Korhonen said while legislation exists, enforcement remains inadequate. “The biggest issues we see are unreasonable interest rates, unclear terms, and failure to properly assess creditworthiness.”
Takaisinperintä continues to advocate for tighter supervision of payday lending practices in Finland.
HT
- Previous Article Family weekend returns with kids’ fair, pet events and food celebration
- Next Article Three-month rule threatens Finland’s ability to retain skilled foreign workers
Source: www.helsinkitimes.fi
